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UK Defense Ministry: Ukraine's economy to grow by 3% in 2024

by Abbey Fenbert May 17, 2024 4:40 AM 2 min read
Ukrainian hryvnia bills, Aug. 12, 2023. (Adrien Fillon/NurPhoto via Getty Images)
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The Ukrainian economy will likely grow by 3 percent in 2024, the United Kingdom's Defense Ministry predicted on May 16.

The forecast aligns with previous reports from the International Monetary Fund (IMF) and the National Bank of Ukraine (NBU), which both anticipated growth rates between 3 and 4 percent.

The U.K. Defense Ministry described Ukraine's wartime economy as "resilient" in the face of intensifying Russian attacks on the nation's power grid.  

"Despite attacks by Russia on Ukraine's energy infrastructure, it is likely that Ukraine will see real economic growth of around 3 percent in 2024," the ministry said.

The growth rate continues a trend of economic recovery after Ukraine suffered a staggering 29.1% fall in gross domestic product (GDP) when Russia launched its full-scale invasion in 2022.

The U.K. Defense Ministry also noted that the NBU has updated its inflation forecast, projecting an 8.2 percent inflation rate for 2024 down from its previous estimate of 8.6. Inflation is expected to increase in the second half of 2024, as costs for businesses rise and the effects of last year's exceptional harvest recede.

"Continued improvements in the economic conditions of Ukraine" have led to progressively lower interest rates, the U.K. Defense Ministry said. The NBU decreased the base interest rate from 14.5 percent in March to 13.5 percent at the end of April.

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